Fonterra drops to seventh in global dairy rankings, Lactalis leads

Fonterra has slipped a notch to become the world’s seventh biggest dairy company while French food group Lactalis has easily retained its number one spot, Rabobank says in its annual Global Dairy Top 20 report.

Earlier this month, Lactalis bought Fonterra’s consumer business, under the Mainland banner, for $4.22b, marking just one of a long line of acquisitions over the past year or so.

Rabobank said Denmark’s Arla moved up to sixth place in 2024, pushing Fonterra to seventh.

After the Lactalis deal, the bank said maintaining Fonterra’s current position on the list in future years was unlikely.

“RaboResearch says it expects the divestment will see Fonterra drop to 10th spot next year,” it said.

Rabobank said 2024 was the year of subtle shifts, with eight companies switching places.

The report, which analyses the financial performance of the world’s leading dairy companies, found the combined turnover of the Global Dairy Top 20 in 2024 increased by 0.6% in United States dollar terms.

Lactalis retained and widened its lead as the largest global dairy company, with the top five rounded out by Switzerland’s Nestlé, Dairy Farmers of America, France’s Danone, and China’s Yili.

Looking further ahead, RaboResearch said it expects only about half the companies listed to maintain their positions in 2026 with significant merger and acquisition activity on the horizon.

Lactalis strengthened its hold on the top spot with estimated revenue of US$31.9 billion ($54.2b) in 2024.

In one of its key moves last year, Lactalis acquired Nestle’s coffee creamer brand Cremora in South Africa, strengthening its footprint in the country where it has had a strong presence since its 2011 acquisition of Parmalat.

The report says Lactalis’ appetite for acquisitions “appears insatiable” and, with larger acquisitions in the pipeline for 2025-26 and Nestle’s growth limited, it could extend its lead to over US$10b ($17b) in the future.

The report says Canada’s Saputo recorded the strongest year-on-year revenue growth of the Top 20 companies, with an 8.4% increase in US dollar terms.

After declining in 2023, Saputo’s revenues increased to US$13.9b ($23.6b) in 2024, enough to push it above China’s Mengniu and into ninth place on the list.

Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.